In his column for the Ukrainian Forbes, the co-owner of the Aurora chain of stores, operating in the one dollar store format, spoke about the main principles of doing business that help the retailer develop at incredible speed. RAU invites you to familiarize yourself with the adapted version.
Currently, the Aurora chain of stores consists of more than 1,370 retail outlets, 13 of which operate in Romania. In 2023, Aurora increased by 495 markets, and its revenue doubled – to UAH 26.9 billion. On average, a new store opened every 18 hours. Lev Zhidenko founded the company in Poltava in 2011 together with partner Taras Panasenko . In 2021, the Horizon Capital fund invested in a promising retailer. Now Lev Zhidenko is the owner of more than 50% of the company, and the remaining shares are distributed between Panasenko, Aurora CFO Lesya Klimenko and Horizon Capital.
About the main strength of a businessman
Being a friendly person is more valuable and in demand than professional skills for building a team. The greatest entrepreneurial strength is seeing where you can turn a problem into a product or service. The CEO should be involved in operational activities, and the owners should look more at the methodology, at what the company will do in five years. Taras Panasenko is a genius in operations, able-bodied, attentive, and humane. But a strategy also works when it is general and not approved individually.
About starting a business
I earned my first $20 in the 10th grade, when I worked as a DJ at a disco in the summer. Subsequently, he sold cassettes at the market in the village of Opishnya, Poltava region. He opened his first company in 2002, immediately after graduating from the university in Dnepr. Helped FMCG products get onto store shelves.
Then he started working in the energy services business when problems arose in his father’s energy business. To do this, he returned to Opishnya and created a company, which he managed based on his father’s experience, but with his own approach. She specialized in engineering services for oil and gas companies.
About the creation of Aurora
The idea of selling everything for $1 was proposed by Taras Panasenko. He was ready to take responsibility and implement this business, which became one of the company's values: take responsibility and get opportunity. Opening a store in the one dollar store segment, when you are engaged in an almost scientific business, seemed frivolous. Therefore, there were doubts about the business model. The first investment was about $32,000 – money set aside to buy an apartment. During the time of Yanukovych, running a business where everything was sold for 5 UAH meant remaining unnoticed by officials, and that was good.
About working on bugs
Mistakes are normal. The main thing is to create a system in which the same mistakes would not be repeated. Thus, out of 100,000 problems recorded over the last two years, 92% do not recur. The word “problem” summarizes everything that prevented us from being better.
The Aurora company does not have fines for suppliers, even if they violate something. Everything is considered as science for the future. To solve a problem, you need to understand how to do it better. I would like my partners to feel trust and treat the retailer the same way. In a legal sense, there may be penalties in the contract, but no one has ever been fined.
About searching for new solutions
In 2018, the retailer began implementing the Lean system when it became clear that existing knowledge and skills were no longer sufficient. The search for other management methods discovered that Lean (a system of lean production that involves continuous improvements to eliminate all types of waste) is one of the components of managing truly large companies.
The leader must first project everything onto himself, trying to figure out what he did wrong. Only in the sixth year of Lean implementation did it become clear that doubts or disbelief among team members were normal. If someone does not believe, then the actions of the management are unconvincing, and the training is incomprehensible.
About trust as a way to reduce costs
A person should be trusted until he has done his best to prove that it does not make sense. Absolute trust in people leads to bitter disappointments and losses, but trust also reduces costs. For example, in retail there is a rule that the buyer has the right to return goods within 14 days. In the Aurora network this period is 30 days. Of course, there is a certain percentage of people who abuse this rule. But the vast majority do not want to deceive anyone. Abuses are not worthy of doubting all other people. That’s why Aurora printed Grigory Skovoroda’s saying on its coffee cups: “If I want to be loved, I love myself first.” This is actually one of the principles of leadership – if you want to be trusted, you must learn to trust yourself.
About the search for common victory
Within the team, it is important to reproduce the principle that in any situation you need to look for a win-win. Always and in everything, without exception. Because of this principle of mutual respect, decisions are made more slowly. We need to speak and hear. However, the result is a mutual benefit. Ukrainian language is friendlier than Russian. In 2020, the company’s work was finally transferred to Ukrainian. The obvious reason for this decision is that the war with Russia was already underway. No one was specifically forced, but implemented according to their own example.
About work-life balance
The book “The 7 Habits of Extremely Effective People” by Stephen Covey is about me. Now it is difficult to separate what is your own skills and what is a consequence of the knowledge gained from the book. Entrepreneurs starting their journey should read Lean Startup by Eric Ries and the Agile concept in general. These methods are very useful for beginners. Burnout is a frequent companion to continuous work. It is good to deal with this by traveling behind the wheel or traveling into the forest. A study was conducted in Sweden on the impact of forests on humans. It turned out that due to the inclusion of natural human mechanisms in the forest, you can recover better in two or three days than at an all inclusive resort in 10 days. Also inspired by rock music and old school rap from the 1990s. Sometimes lounge or classical music, tech house. I listen to music when I’m driving along the Kyiv-Kharkov highway, when I can turn the sound up to full volume.
